The 2025 Autumn Budget, delivered by Chancellor Rachel Reeves on 26 November, has set out several major changes that will impact the UK property market. From increases in income tax on rental earnings to a new long term surcharge for high value homes, these measures will reshape how landlords, investors and homeowners plan for the future. Renters may also see shifts in supply and pricing as the market adjusts. Here’s what we know so far, and how to navigate the months ahead.
The Key Property Measures Changing
1. New “Mansion Tax” on High Value Homes
- The government has confirmed its intention to introduce a new annual surcharge on homes valued over £2 million.
- This will take effect from April 2028, with valuations expected to be based on 2026 property values.
- The government has not yet released detailed guidance on how this surcharge will be calculated, assessed or collected. More information is expected in future government updates during 2026 and 2027.
- For owners of premium homes, this signals the introduction of a recurring cost rather than a one off purchase tax.
2. Higher Tax on Property Income
- From April 2027, landlords and investors will face a 2 percentage point increase on property income tax.
- New rates will rise to 22%, 42% and 47%.
- This will put further pressure on net yields, making financial planning increasingly important.
3. No Changes to Stamp Duty (SDLT)
- Despite rumours ahead of the Budget, SDLT remains unchanged.
- Buyers should continue to factor existing SDLT costs into purchase budgets.
4. Uncertainty Already Impacting the High End Market
- Even pre Budget, agreed sales for homes over £2m had slowed.
- The announcement of the upcoming surcharge and increased income tax has added further uncertainty for premium property buyers and sellers.
Key Takeaways: What This Means for You
- High value homeowners must prepare for a new recurring tax from 2028
- Landlords should reassess net yields in light of higher income tax
- SDLT remains unchanged for all purchases
- £2m+ properties may experience reduced demand
- Mid market rental supply could tighten, potentially increasing rents
Implications for Landlords and Investors
The combination of increased income tax and a future surcharge on high value homes may reshape investment strategies, particularly for those with large or premium property portfolios.
Many landlords may need to review cash flow, rent levels and long term ROI projections. If mortgage rates remain elevated, the impact on profitability could become more noticeable.
This is where property management services in Manchester, like those provided by Northern Group based in Ancoats, can be especially valuable. Ensuring strong occupancy, proactive maintenance and compliance support can help protect yields during periods of uncertainty.
What Buyers and Homeowners Should Know
If you’re purchasing below £2m, the biggest news is that SDLT remains unchanged.
However, buyers of higher value homes should begin planning for possible recurring annual costs from 2028. While the final details are yet to be confirmed, it’s wise to factor potential ongoing taxation into longer term affordability planning.
For sellers, particularly at the top end of the market, conditions may soften as buyers weigh future tax burdens.
How Professional Management and Local Expertise Can Help
With so many policy shifts emerging, reliable advice and hands on support are more important than ever.
At Northern Group, we help landlords, investors and homeowners make informed decisions through:
- Regular yield and tax impact reviews
- Full service property management to reduce risk and protect value
- Expert marketing, tenant sourcing and retention strategies
- Compliance oversight to ensure all legal responsibilities are met
Professional property management in Manchester and the surrounding areas is crucial in safeguarding returns and maintaining strong occupancy, especially during periods of economic change.
What to Watch Next
- Detailed government guidance on the high value property surcharge (expected during 2026–2027)
- Future announcements around council tax or wealth based property taxes
- Mortgage rate and inflation changes that may influence affordability
- Rental market supply shifts, with some landlords exiting due to higher taxation
Need Advice or Support?
The Autumn Budget 2025 marks a pivotal moment for the UK property market. Whether you’re a landlord, investor or homeowner, the next few years will require strategic planning and a clear understanding of the evolving landscape.
Northern Group is here to help.
If you’d like support and guidance on property management, compliance or investing in Manchester, get in touch with our team today.